Garda World Security Corporation
TSX : GW

Garda World Security Corporation

September 07, 2012 12:01 ET

Garda Reports Second Quarter Results

- Operating profit up 28.0% at $36.3 million

- Organic growth at 10.8%

- Net income up 29% at $4.9 million

MONTREAL, QUEBEC, CANADA--(Marketwire - Sept. 7, 2012) - Garda World Security Corporation ("Garda") (TSX:GW), one of the leading Security Solutions and Cash Logistics firms in the world, announced today its financial results for the second quarter ended July 31, 2012.

For the Quarter ended July 31, 2012 (May - July)

  • Revenue increase of 13.7% at $337 million ($297 million)
    • Cash Logistics revenue increase of 12.7%
      • US operations up 13.9%
    • Security Solutions revenue increase of 14.5%
      • Emerging markets up 81.8%
      • Canadian security up 10.1% (excluding airport operations)
  • Gross profit up 20% at $80.5 million ($67.0 million)
  • Operating profit of 10.8% at 36.3 million (9.6% at $28.4 million)
  • Strong cash flow from operations at $35.7 million ($27.8 million)
  • Net income at $4.9 million or $0.15 basic per share ($3.8 million or $0.12 per share)
  • Net debt amounted to $625 million; pro-forma leverage ratio stands at 4.2
  • Acquisition of McKinnon Services successfully completed on July 8, 2012

"The robust performance of the past five quarters continues with strong results this quarter," said Patrick Prince, Senior Vice President and Chief Financial Officer. "We have built a solid foundation for continued earnings and have efficiently integrated growth within our platforms. All of our operating units delivered solid operating profit with an increase of 28% over last year. Security Solutions and Cash Logistics respectively showed an increase of 23% and 30%."

"These second quarter results are exceptionally strong and our platforms delivered the growth we expected," noted Stephan Cretier, President and CEO. "We capitalized on the opportunities that we created and continued to build the capacity that will drive our future growth. In Cash Logistics, the integration of new clients within our footprint generated increased revenues of 12.7% over last year and created strong synergies and operational efficiencies. In Security Solutions, emerging markets performed exceptionally well with increased revenues of 81.8% over last year as a result of the high volume of growth in the Oil and Gas industry in the Middle East and the development of the diplomatic sector in Afghanistan."

FINANCIAL HIGHLIGHTS (Three months)
Three months
ended
July 31, 2012

% of
revenues
Three months
ended
July 31, 2011

% of
revenues


Variance


Variance
$ CAN $ CAN $%
Revenues
Security Solutions177,920 155,419 22,50114.5%
Canada138,728 133,861 4,8673.6%
Emerging markets39,192 21,558 17,63481.8%
Cash Logistics159,112 141,128 17,98412.7%
Canada21,265 20,112 1,1535.7%
United States137,847 121,016 16,83113.9%
Total337,032100.0%296,547100.0%40,48513.7%
Canada159,99347.5%153,97351.9%6,0203.9%
United States137,84740.9%121,01640.8%16,83113.9%
Emerging markets39,19211.6%21,5587.3%17,63481.8%
Operating profit 136,34310.8%28,3939.6%7,95028.0%
Security Solutions11,1946.3%9,0765.8%2,11823.3%
Cash Logistics25,14915.8%19,31713.7%5,83230.2%
Gross profit180,53723.9%67,03222.6%13,50520.1%
Security Solutions26,88115.1%21,60413.9%5,27724.4%
Cash Logistics53,65633.7%45,42832.2%8,22818.1%
Net income for the period4,912 3,813 1,09928.8%
Cash flow from operationsbefore changes in non-cashworking capital

35,667


27,763


7,904


28.5%
1 Please refer to section "Reconciliation of non-IFRS financial measures"

FINANCIAL HIGHLIGHTS (Six months)
Six months
ended
July 31, 2012

% of
revenues
Six months
ended
July 31, 2011

% of
revenues


Variance


Variance
$ CAN $ CAN $%
Revenues
Security Solutions349,693 303,774 45,91915.1%
Canada274,484 262,717 11,7674.5%
Emerging markets75,209 41,057 34,15283.2%
Cash Logistics307,885 278,771 29,11410.4%
Canada41,537 39,639 1,8984.8%
United States266,348 239,132 27,21611.4%
Total657,578100.0%582,545100.0%75,03312.9%
Canada316,02148.1%302,35651.9%13,6654.5%
United States266,34840.5%239,13241.0%27,21611.4%
Emerging markets75,20911.4%41,0577.1%34,15283.2%
Operating profit 171,86910.9%57,8909.9%13,97924.1%
Security Solutions22,7726.5%16,7505.5%6,02236.0%
Cash Logistics49,09715.9%41,14014.8%7,95719.3%
Gross profit1157,80024.0%131,45222.6%26,34820.0%
Security Solutions52,96315.1%39,64213.0%13,32133.6%
Cash Logistics104,83734.1%91,81032.9%13,02714.2%
Net income for the period11,171 8,300 2,87134.6%
Cash flow from operations
before changes in non-cash
working capital


71,169




57,042




14,127


24.8%
1 Please refer to section "Reconciliation of non-IFRS financial measures"

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Garda's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee", "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the company's future revenues and benefits and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which Garda believes are reasonable according to the current circumstances. While management considers these assumptions to be reasonable based on information currently available to the company, they may prove to be incorrect. The company cautions the reader that the current economic conditions make forward-looking information and the underlying assumptions used by Garda subject to uncertainty and that, consequently, they may not materialize, or the results may differ from the company's expectations. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Garda currently expects. These factors include growth management, market competition, cost of financing, government regulations, collective bargaining, currency fluctuations, credit risk, reputational risk and financial covenants risk, many of which are beyond the company's control. Therefore, future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date.

This analysis should be read in conjunction with the company's unaudited consolidated interim financial statements, and the notes thereto, prepared in accordance with IFRS and the MD&A of the second quarter ended July 31, 2012.

All amounts referenced herein are in Canadian dollars.

CONFERENCE CALL

Stephan Cretier, President & CEO, and Patrick Prince, Senior Vice President & CFO, will discuss the second quarter results today, September 7, 2012 at 02:00 PM ET during a conference call with financial analysts and institutional investors. Listeners may access the call by dialing +1 800.734.8507 or +1.416.981.9000 for international calls.

MD&A FILING

Garda's Management's Discussion and Analysis for the second quarter ended July 31st, 2012 was filed on SEDAR on September 7, 2012 and is available on the web site www.garda.com in the investors' section as of September 7, 2012.

ABOUT GARDA

Garda is a global provider of security and cash logistics solutions. With headquarters in Montreal, Canada, the firm's 45,000 dedicated professionals, among the most highly qualified and best-trained in the industry, serve clients in countries throughout North America, Europe, Latin America, Africa, Asia and the Middle East. Garda works with clients in a broad range of sectors and industries including financial institutions, retailers, governments, humanitarian relief organizations and the natural resources, construction and telecommunications industries. Garda's global experts take the time to fully understand their clients' business goals and objectives in order to customize solutions with strong local engagement that meet their needs.

As a result, clients can improve operational performance, meet their business obligations, and achieve their corporate objectives. With proven experience and a commitment to ensuring the highest ethical standards in everything the company does, Garda has earned a reputation for integrity, leadership and uncompromising safety standards. Most importantly, businesses, governments and individual clients place their trust in Garda. For more information, visit: www.garda.com.

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